The long shadow of the 2023 banking crisis
By John Heltman
The immediate banking crisis of March 2023 has subsided, but what will the consequences be? On this episode of the BankShot podcast, experts explain what they think will happen next….From American Banker, I’m John Heltman, and this is BankShot, a podcast about banks, finance, and the world we live in….Boy, what a couple of weeks. Karen Petrou: It’s certainly has been nonstop. I told other people it felt like finals all over again….I mean, this is my fourth banking crisis, because I’ve been doing this so long. We advised the National Commission on the origins of the S&L crisis, and what were the takeaways from the S&L crisis. Well, they were two things in very broad strokes: the need for rigorous capital requirements and for rapid supervisory intervention. And so you see a lot of it, the causes of the crises are different in that the S&Ls had interest rate risk and credit risk. And then the banks in the late 90s had mostly credit risk and the commercial real estate, and then in ’08, it was a combination of credit of capital and liquid credit, and therefore capital and liquidity and complexity risk. But in each case, you see a huge amount of supervisory forbearance….